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Coats posts 5% sales growth in first quarter

Coats, the leading industrial thread manufacturer, has reported an increase in sales following strong demand from the apparel and footwear sectors.

The company said sales for the period 1 January to 30 April grew 5% at constant exchange rates, while reported sales growth was 8% due to the US dollar weakening against key currencies like the yuan, euro, rupee and Mexican peso.

The UK-based group’s industrial business enjoyed strong performance, with the Apparel and Footwear business seeing sales up 3% and the Performance Materials business up 19% year-on-year. The acquisition of Patrick Yarn Mill in the US in December boosted the Performance Materials business by 15%, according to a release.

While the industrial division boomed, the crafts division suffered a setback in North America, where market conditions remained tough. This, coupled with the adverse impact of the introduction of own-label hand knitting products at a major customer, meant that Crafts sales declined 4% at current exchange rates.

Coats has embarked on a two year transformation programme designed to take the business into the digital age. This project is expected to help it deliver net annualised operating cost savings of $15 million by 2020.

Looking ahead, Coats anticipates delivering 2018 full year results in line with expectations.

​In a rare takeover of a US firm by a UK-based one, yarns giant Coats Group on Monday said it has bought Patrick Yarn Mill for an initial price of $21m with the buy boosting its presence in performance and eco yarns.

Coats Group, the leading manufacturer of sewing thread and supplies, shrugged off ongoing pricing pressures and a continued mix demand from clothing retailers as it announced a 2% increase in sales on Thursday.